Market Analysis » Silver prices

Weekly Review World Markets

anna — Mon, 09 Feb 2009 15:27:24 +0000

It was a better week for world stock markets last week, with all the major indices pushing further off the January lows.

Despite Friday’s US payrolls falling by a more than expected 598,000, stock markets powered higher. This was an extremely weak employment report, with 3.5 million fewer Americans employed In January than a year earlier. However, the world’s biggest economy isn’t willing to roll over and die just yet. The rate of decline is accelerating, but US unemployment is still below the peaks of the 1980s and 1970s. Stock markets moved higher on the hope that Friday’s dire figures will act as a catalyst for the massive Obama stimulus package.

In the UK, banks pushed higher as speculation mounts that the bad bank plan is back on the cards. RBS is rumoured to be the first test of this model with other banks applying this template if successful. Judging by the rally in financial shares last week, traders are keen on this plan to come to fruition.

Commodities continued to drift lower, with oil prices falling through support at $40. Oil producers shrugged off the news to finish up on the week. However, lower energy prices cannot be shrugged off by all of those with a stake in the commodity. The Russian government had its credit rating downgraded due to fears over the impact of the collapse in oil prices. The rouble continued its free fall.

Last week, the Bank of England cut rates to 1% as widely expected, and at the same time, the ECB signalled that it may cut rates in March. Despite the cut, it was a good week for Sterling, especially against the euro, as traders adjust their positions in light of the strong rate cut hint from Trichet.

There was some positive news from the Halifax housing report which showed that UK house prices rose last month. However, it is hard to read too much into this rise as the data conflicts with the previously released Nationwide report, and month to month figures are often subject to wide variance. This week’s highlights include a number of speeches from prominent central bankers including Treasury secretary Geithner, and FOMC chairman Ben Bernanke on Tuesday. On Wednesday Governor King speaks at the release of the BOE inflation report. ECB president, Trichet is due to speak on Thursday. Aside from this, we also have US retail sales and unemployment claims on Thursday.

When stock markets go up on bad news as they did last week, it is often a good sign that investors have re-discovered their appetite for risk taking. Even BP and Shell were moving higher on Friday, despite oil prices dipping below $40 a barrel. The bears have been handed plenty of opportunities to take control, but so far today, the bulls have won out. That is arguably a very encouraging indication that 2009 won”t end the year as it started.

Spot Silver Prices – January 19th 2009

anna — Mon, 19 Jan 2009 11:56:48 +0000

Spot silver prices closed sharply higher Friday in reaction to a strong gold and weaker US currency with additional boost coming from a surge in the base metals. As I have mentioned before, along with its tag as a precious metal, silver has many industrial applications so significant moves in base metals will usually affect the white metal too. Silver is in fact no longer classified as a precious metal, but an industrial one, and therefore one can argue that the relationship with other base metals such as copper and zinc should have a greater impact on future prices, than the more traditional one of that with gold. Interestingly silver finished the week better than gold after speculation of being under priced compared to the yellow metal. My long term view of silver is bullish, and I will have a new site for silver traders up and running tomorrow which will be devoted just to silver trading and investing.

The short and medium term trends are bearish while the long term trend is bullish.

Support: $10.950 (low of 09/01/09) Resistance: $11.600 (high of 09/01/09)

Support: $10.770 (low of 08/01/09) Resistance: $11.540 (high of 06/01/09)

Support: $10.550 (Friday’s low) Resistance: $11.300 (Friday’s high)

Daily Silver Prices – January 16th 2009

anna — Fri, 16 Jan 2009 12:17:21 +0000

Daily silver prices closed slightly down yesterday crossing below the 40 day moving average for the third day but then moving up above the indicator. Like the spot gold price, the slide in the price of silver was triggered by an increasingly strong US currency and weaker crude oil prices. After trading upwards for most of December 2008, more recently the chart shows a period of lower lows and lower highs although this must be viewed in the context of the longer term. In the last few days we have seen two doji candles and a hammer, so we could see a small bounce upwards in spot silver prices today.

The short and medium term trends are bearish while the long term trend is bullish

Support: $10.310 (yesterday’s low) Resistance: $11.017 (14 day moving average)

Support: $10.210 (low of 15/12/08) Resistance: $10.868 (9 day moving average)

Support: $10.120 (low of 11/12/08) Resistance: $10.890 (high of 14/01/09)

Spot Silver Prices – January 15th 2009

anna — Thu, 15 Jan 2009 10:55:51 +0000

Daily spot silver prices declined yesterday pressured by the same steeply falling stock markets that hit spot gold prices. In addition to being considered a precious metal, silver is also widely used for industrial applications, more than the yellow metal so deflation has the potential to add extra pressure. Probably the feature that’s keeping silver from falling faster than gold, every time demand deterioration is on the news, is the fact that currently the white metal is perceived as underpriced compared to gold. As I have said many times before this is a dangerous assumption to make. Over the years the ratio between gold and silver has varied from the pegged 15, to a high of almost 100, and now sits around the 75 level. Where the true ratio is, is ofcourse anyone’s guess!

The short and medium term trends are bearish while the long term trend is bullish

Support: $10.310 (yesterday’s low) Resistance: $11.033 (14 day moving average)

Support: $10.210 (low of 15/12/08) Resistance: $10.925 (9 day moving average)

Support: $10.120 (low of 11/12/08) Resistance: $10.890 (yesterday’s high)

Spot Silver Prices – January 14th 2009

anna — Wed, 14 Jan 2009 12:27:03 +0000

Spot silver performed better than the spot gold price yesterday closing higher, although it crossed below the 40 day moving average. Behind the early session slide was probably a bearish industrial demand which seems to stubbornly make the headlines on a daily basis. As a gold follower, silver is likely to remain under pressure as well, at least for the short term, given the perception for further interest rate cuts by central banks in an environment where disinflation is the name of the current game.

The short term trend is sideways, the medium term trend is bearish while the long term trend is bullish.

Support: $10.400 (yesterday low) Resistance: $11.290 (high of 12/01/09)

Support: $10.210 (low of 15/12/08) Resistance: $11.054 (14 day moving average)

Support: $10.120 (low of 11/12/08) Resistance: $10.850 (low of 07/01/09)

Daily Silver Prices – Spot Market

anna — Tue, 13 Jan 2009 11:39:24 +0000

Yesterday, after a week of testing the 9 and 14 day moving averages the spot silver price broke convincingly below these indicators stopping slightly above the 40 day moving average. Like gold the white metal nosedived hit by liquidation of previous long positions amid a strong US currency and lower crude oil. It is also possible that a break below the $11.00 level made a few investors nervous who were hoping to capitalize on the perceived under priced silver compared to gold – always a dangerous assumption. Silver prices are currently trading in a narrow sideways range as I write, between $10.55 and $10.70 on the hourly chart. The short term trend is sideways, the medium term trend is bearish while the long term trend is bullish.

Support: $10.510 (yesterday low) Resistance: $11.290 (yesterday high)

Support: $10.450 (high of 24/12/08) Resistance: $11.016 (14 day moving average)

Support: $10.210 (low of 15/12/08) Resistance: $10.850 (low of 07/01/09)

Spot Silver Prices – 12th January 2009

anna — Mon, 12 Jan 2009 11:39:15 +0000

Daily spot silver prices closed modestly higher on Friday, even as the spot gold price moved lower and the US dollar continued its upward trend, possibly on relief that payrolls data was broadly in line with expectations. As I mentioned before, long positions in silver have not built up as rapidly as in gold, so now the white metal sees less liquidation pressure. In addition many traders entertain the idea that silver is somewhat underpriced compared to gold adding to the speculation in the silver market. The short and long term trends are bullish while medium term trend is bearish.

Support: $10.950 (Friday low) Resistance: $11.747 (high of 05/01/09)

Support: $10.770 (low of 08/01/09) Resistance: $11.600 (Friday high)

Support: $10.540 (low of 05/01/09) Resistance: $11.400 (high of 31/12/08)

Spot Silver Prices – January 9th 2009

anna — Fri, 09 Jan 2009 10:14:50 +0000

Following gold prices, the price of silver was slightly higher yesterday in response to a weaker US currency. The soft market seemed to indicate that participants were in no mood to commit too much before today’s US employment figures which could be the catalyst for a breakout in either direction. One interesting fact to mention according to the Silver Institute is that ‘the 2008 average silver price was $14.98, nearly a 12% increase over 2007 – the best average annual price since 1980’.The short and long term trends are bullish while medium term trend is bearish.

Support: $10.770 (yesterday low) Resistance: $11.747 (high of 05/01/09)

Support: $10.750 (low of 06/01/09) Resistance: $11.585 (high of 07/01/09)

Support: $10.540 (low of 05/01/09) Resistance: $11.330 (yesterday high)

Spot Silver Prices – January 2009

anna — Thu, 08 Jan 2009 10:55:25 +0000

In the face of a weaker US currency spot silver prices also fell yesterday although the decline was less than gold in percentage terms. The price of silver has not seen the same big rallies as gold in the last few weeks which suggests there’s less selling potential in the case of a pullback. In addition, as I mentioned before some traders think that silver has been left behind by gold lately so this race to catch up is drawing in extra buying. The short and long term trends are bullish while medium term trend is bearish.

Support: $10.850 (yesterday low) Resistance: $12.080 (high of 08/10/08)

Support: $10.750 (low of 06/01/09) Resistance: $11.747 (high of 05/01/09)

Support: $10.540 (low of 05/01/09) Resistance: $11.585 (yesterday high)

Daily Silver Prices Rally In Late Trading

anna — Wed, 07 Jan 2009 12:59:20 +0000

Following gold, the daily spot price of silver was initially weaker but then staged a late session rally to close higher as the US dollar gave back some of its early gains. The chart shows an inside day pattern which suggests that silver held up better than gold with a possible explanation being that the long positions in the silver market have not built up as rapidly as for gold. Poor economic conditions add extra pressure on silver investors since it has more industrial applications than gold. The short and long term trends are bullish while medium term trend is bearish.

Support: $10.750 (yesterday low) Resistance: $12.080 (high of 08/10/08)

Support: $10.540 (low of 05/01/09) Resistance: $11.747 (high of 05/01/09)

Support: $10.420 (low of 16/12/08) Resistance: $11.540 (yesterday high)